The government constantly fails to prioritize economic development with its poor planning, weak institutional and fiscal frameworks
Two weeks ago, President Bola Tinubu approved the establishment of the Presidential Compressed Natural Gas Initiative (PCNGI).
The President revealed that the initiative would change the country’s transportation landscape, targeting over 11,500 new Compressed Natural Gas (CNG)-enabled vehicles and 55,000 CNG conversion kits for existing Premium Motor Spirit-dependent vehicles.
Although the number is little compared to the 11.8 million vehicles on the roads in Nigeria, the initiative is a good start in the right direction. The program will also incentivize investors to invest in CNG processing, distribution, and utilization by providing incentives for enhanced investment and partnership among others.
This came after the Nigerian National Petroleum Company Limited (NNPCL) announced a strategic partnership with NIPCO Gas Limited to deploy Compressed Natural Gas (CNG) stations across the country published in the first week of August. The first phase, comprising 21 CNG stations, will support intra-city transportation and be ready by the first quarter of 2024.
It seems at least, there is a unified vision between the presidency and the NNPCL. Surely on paper, these are all quite wonderful, but timeliness and pragmatism are two qualities Nigerian governments have sorely lacked in tackling the country’s pressing issues.
Nigerians don’t trust the dates put forward by the government. The first 21 CNG stations may not be ready by the first quarter of 2024 as stated. It is interesting to note that the idea of using CNG as an automotive fuel is not at all new. In 1997, the Nigerian government proposed the use of CNG as an automotive fuel as part of the initiatives to harness natural gas resources. Unfortunately, the practical development of this initiative has been at a sloth’s pace.
The government constantly fails to prioritize economic development with its poor planning, and weak institutional and fiscal frameworks. In 2020, NNPCL launched an autogas policy and promised that it would provide free conversion services to enable automobiles to switch from premium motor spirit (PMS) to autogas. Three years down the line, the target of converting one million vehicles by the end of 2021 has come to nought.
Last year, the Federal Government unveiled a plan to convert 200,000 commercial vehicles to run on gas in 2022. The lofty plan, as expected, witnessed huge setbacks, with stakeholders describing hindrances such as the high cost of conversion and the non-availability of the one million conversion kits promised by the Federal Government.
In Nigeria’s Energy Transition Plan (ETP), gas is positioned to play a critical role as a transition fuel in our net-zero pathway. There is no better time to begin laying the foundations for the usage of gas than now. In the face of fuel subsidy removal, gas-powered vehicles serve as a befitting alternative. Mind you, Nigeria has substantial gas reserves, ranking the 9th largest globally with 209.5 trillion cubic feet (tcf) of verified gas reserves.
Natural gas possesses many qualities that make it an efficient, relatively clean burning, and economical energy source, according to the US Energy Information Administration (EIA). Burning natural gas for energy results in fewer emissions of nearly all types of air pollutants and carbon dioxide (CO2) than burning coal or petroleum products to produce an equal amount of energy. To use natural gas as a transition fuel means to substitute high-content fossil fuels such as coal and oil with natural gas, which is considered a low-carbon fuel. This is to reduce CO2 emissions in the near future.
However, myths and potential misinformation could affect widespread adoption by the masses. Recall that safety concerns were one of the major things that frustrated former President Muhammadu Buhari’s autogas plan. What most Nigerians don’t know is that CNG is safer in the event of a collision as compared to vehicles powered by gasoline or diesel, owing to its nature, storage conditions, and location in the car. Moreover, a CNG vehicle causes less noise pollution than petrol or diesel cars.
The government must therefore work in tandem with all investors and stakeholders to dispel the myths surrounding CNG vehicles and increase the knowledge base of the advantages of CNG vehicles which will spur usage. Consequently, this will provide automakers the leverage to expand CNG offerings while popularising its key benefits.
Whatever the Federal Government does, it should offer subsidies to manufacturers, tax credits, and cash rebates to customers. For instance, Italy introduced a program to promote CNG and LPG in the transport sector in 2003, along with purchase incentives ranging from 1,500 to 3,500 euros, and scrappage bonuses for CNG and LPG cars in 2009. Although the recently launched Presidential Compressed Natural Gas Initiative (PCNGI) appears to contain some forms of incentives to entice investors, they should be made clearer.
Furthermore, CNG filling stations are essential infrastructure for a successful transition to CNG-powered vehicles, but in Nigeria, CNG stations are relatively scarce, and this will make it harder for Nigerians to easily access refueling options for their vehicles.
Natural gas powers more than 175,000 vehicles in the United States and roughly 23 million vehicles worldwide, according to the US Department of Energy. African countries like Equatorial Guinea, Kenya, Tanzania, Algeria, and Egypt are investing hard in CNG vehicles. Egypt boasts of over 400,000 CNG-powered vehicles, with ongoing efforts to expand that number.
Taking a cue from other nations and experts, Tinubu’s administration must do more than churn out proposals and policies without diligent implementation. All structures needed to make this work must be tightly placed on board. Introducing the next phase of transportation using CNG can augment Nigeria’s transition movement as a significant, easily available, and rather clean fuel option while preparing other alternative fuel vehicles like electric vehicles (EVs) and making them common in the future.